Before you make any decisions about Medicare, start by learning more about the components of cost sharing under Part D.
- Premium. If you join a Medicare Advantage plan that includes Part D coverage, you will not have to pay a separate premium for Part D, but you must continue to pay your Part B premium and - if you have one - your Part A premium. Stand-alone Part D plans charge their own premiums, which can vary widely since they are provided by private insurance companies.
- Deductible. The fee you must pay for care before Medicare or a private insurance company begins to cover costs. Some Medicare Part D plans charge deductibles and some don't. Look at the plan for details.
- Co-payment (or co-pay). A fixed fee you pay at the time of service. Some drug plans charge a co-payment each time you fill a prescription; look at the plan for details.
- Coinsurance. The difference between what percentage Medicare pays and what percent you pay for health care costs. Some drug plans charge a percentage of the cost when you fill a prescription.
MANAGING THE MEDICARE PART D COVERAGE GAP
The Medicare Part D "coverage gap" occurs once you and your Medicare Part D plan have collectively spent a specific amount ($2,830 in 2010) on prescription drugs during the year. While in the gap, you pay 100% of your drug expenses at the plan's discounted rate until you spend $4,550 in True Out-Of-Pocket (TrOOP) costs for the year. TrOOP is calculated on the amount you paid for prescriptions leading up to the coverage gap, plus the amount you paid for prescriptions while you were in the coverage gap.
After reaching your TrOOP limit, you leave the coverage gap and enter the "catastrophic coverage" stage. Once you enter this stage, you pay a small copay or coinsurance and your prescription drug plan pays the remainder of the costs for each covered prescription drug until the end of the year with no limit.
If your plan does not offer coverage through copays or coinsurance in the gap, the best ways to manage the added costs is to delay falling into the gap or avoid it completely by lowering your total drug costs.
Consider these money-saving tips to slow the rate at which you approach the coverage gap:
- Switch to Tier 1 or Tier 2 drugs or generic versions for reduced copays and costs. Each insurance company's formulary, or list of drugs, groups drugs into levels or tiers. Drugs grouped in the lower tiers (1 & 2) are often generic versions of name brand drugs and/or lower-cost alternatives. Ask your doctor about lower-tier drugs that may be right for you.
- Review current medications. Ask your doctor if you take prescriptions that are no longer necessary.
- Fill new prescriptions in small amounts. Commit to larger quantities when you know how you respond to the medication.
- Go to pharmacies in your network to receive the plans' discount price on your covered prescription drugs.
- Use a mail service pharmacy. Prescription drug mail services deliver directly to your door and may save you money on your medications.
- Track and manage your expenses. Monitor your monthly drug spending to see how close you are to the coverage gap. This may help you decide if you need to ask your doctor about lower-tier drugs.
When you're in the gap, use your Medicare Part D member ID card to receive the plan's discounted drug rates. Using your member ID card also ensures that the money you spend is correctly tracked toward your true out-of-pocket (TrOOP) costs, to help you get out of the coverage gap sooner.
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